For factory workers in America—especially those 45 and older—job security is a dying dream. In recent years record numbers of employees have gotten pink slips. But some are managing to bounce back.

Few know better than Jim McClain, 46, just how debilitating job loss can be. McClain worked at the Abitibi paper mill in Sheldon, Texas, for 23 years, running equipment that recycled a ton of newsprint every minute. When the plant closed, he tried to market his computer and training skills to prospective employers. He even applied to drive a fuel truck in Iraq. Not one offer came through.

"I think being over 40 handicapped me," he says.

Finally McClain returned to school to study nursing, but his government retraining benefits weren't enough to cover his family's expenses. So he depleted his 401(k), then his wife's, before reluctantly declaring bankruptcy in 2007. "It was counter to everything I stand for," he says. A month later, under crushing stress, McClain suffered a stroke that temporarily impaired his speech and mobility. He's now working as a nurse, commuting 35 miles each way, five days a week, and making significantly less than he did at the mill. "Right now," he says, "I don't see any time when I can retire."

Experts say there are many ways for employees to reduce their health risks after a layoff: eating well, getting enough sleep, exercising regularly. Equally important is spending time with loved ones. "The inclination can be to withdraw socially," says clinical psychologist Jeffrey Janata, director of the behavioral-medicine program at the Case Western Reserve University School of Medicine in Cleveland. "It's a time when people are at risk for feeling demoralized and ashamed and guilty. It's important not to give in to that instinct." Janata says displaced workers should try not to spend all their time thinking about work. "People tend to focus on the thing they've lost and forget that pleasure and self-esteem come from many places," he explains. "If they like to bowl with the bowling team, they need to do that. They need to fight the inclination to hole up."

None of these strategies are foolproof, as 53-year-old Susan Kachelries learned. A self-described "class clown," Kachelries worked for 20 years folding baby blankets at the J. E. Morgan Knitting Mills plant in Hometown, Pennsylvania. On the shop floor she was sociable and outspoken. "They used to bring through tours of kids," she recalls. "I always talked to them. I'd say, 'Study. Study hard. Look what I have to do, 3,000 of these a day.' " Still, her $35,000-a-year earnings kept her at Morgan Mills. "I thought I'd be there forever," she says. Then Sara Lee bought the plant and closed it in 2003. The company moved the jobs to Central America.

Kachelries enrolled at a private business school, but she didn't make it to graduation. "I had a nervous breakdown," she says. "It was just everything at one time: school, no work, I didn't have insurance, didn't have anything. I never thought something like this would happen to me, ever. It was devastating." A psychiatrist helped Kachelries through the trauma, and she still takes medication. But her business classes (and the help of a friend) led to a job she loves: as a Walmart customer-service manager. "I'm not working as hard," she says, "and I'm making the same money."